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Does Being Tax Friendly Benefit Your State?

by | May 28, 2009 | Observations

I was out of town last week and was told about a great article in the Wall Street Journal.  So I embarked upon a knowledge search and found it.  The article was titled, “Soak the Rich, Lose the Rich” and was in the May 18th edition of the journal.  It was written by Arthur Laffer and Stephen Moore.

I strongly suggest that all readers of fromgregshead.com read this article.  The article discusses the impact of raising the marginal tax rates on the rich by certain states in the US.  Backed up by research and facts, Laffer and Moore show us that instead of solving problems, this type of thinking by our legislative bodies creates more and bigger problems for their states.

In short, people with higher incomes will migrate to locations with more favorably tax conditions and thus the increased tax rates in the former states actually hurts the middle class more as they have to bear the brunt of the taxes.  Laffer and Moore point examples of state after state that has made their locations more tax friendly and those who have become totally tax dependent bodies.  They highlight the results of each state’s decision.

So what does this mean for us in Houston?  Governor Perry said recently. “Out state is competing with Germany, France, Japan and China for business.  We’d better have pro-growth tax system or those American jobs will be outsourced.”  Laffer and Moore write, “Gov. Perry and Texas have the jobs and prosperity model exactly right.  Texas created more jobs in 2008 than all other 49 states combined.  And Texas is the only stae other than Georgia and North Dakota that is cutting taxes this year.”

I hope you take a moment to read the article and let your representatives know where you stand.
 

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